Europe: High renewables production leads to plunging power prices


Recording a 22% YoY increase, solar and wind energy generation in Germany in May totaled just under 10 TWh. This, combined with improved hydropower levels in the Alps and Nordic region, saw European power prices plunging 16.4%, from €32.72/MWh in May 2014, to €27.37/MWh this May. Compared to the previous month, April, prices decreased 24%, from €36.03/MWh, based on Platts’ Continental Power Index (CONTI).

In Germany, average day-ahead electricity prices totaled €25.30/MWh, thus representing the lowest monthly average in 12 years, "as wind, solar and hydro combined to crash the prompt market," wrote Platts. Overall, day-ahead prices dropped 16% MoM and 19% YoY, with solar and wind outstripping the energy production of the country’s nine remaining nuclear reactors.

In comparison, at £40.82/MWh (around €57.38/MWh), day-ahead power prices in the U.K. decreased by 6% from April, but rose 2% from May 2014. Despite it being Europe’s leading solar market, wind farms and gas fired power stations helped to off-set a drop in coal-fired output, with wind generation almost doubling its May 2014 output, to over 2 TWh.

France saw day-ahead price reductions of 34% MoM and 13% YoY as a result of declining power consumption. Nuclear generation decreased 4% YoY, and hydropower, 3.6%.

In June, wrote Platts, "strong" solar generation was "keeping a lid on prompt prices in Germany and surrounding markets." It added that day-ahead prices in Germany on June 23 were €32.50/MWh.